The Vijayawada Municipal Corporation (VMC) is planning to revise property tax (PT), aiming at augmenting its revenues by Rs. 100 crore. The authorities, who are seriously considering the proposal, cite that the tax revision is long overdue, sources say.
In 2002-03 fiscal year, 1,15,399 properties were assessed and the tax collection was put at Rs.31.41 crore, including the arrears of Rs. 16 crore.
The number of assessments had gone up to 1,58,000 in 2007-08 and it kept on growing consistently.
At present, the corporation is assessing 1.75 lakh properties, including 1.5 lakh residential ones and more than 14,000 commercial properties in the city. The VMC is collecting Rs. 74 crore as property tax, sources say.
The Corporation officials and TDP corporators claim that property tax has not been revised in the last 12 years and there is a gross mismatch between the receipts and expenditure. The corporation is now sailing against odds owing to paucity of funds, growing expenditure on services such as sanitation and water supply.
It is spending around Rs.26 crore on supply of safe drinking water in the city, but the receipts under this head stands at only Rs. 19.06 crore. More so, the VMC is paying an interest of Rs. 3.5 crore per annum on the loans it has availed of. Further, the civic body has mortgaged its 22 properties for availing the loans, the TDP corporators point out.
CPM city secretary Ch. Babu Rao said that the VMC had tried to revise the tax in 2007 and 2011. Faced with stiff resistance to the move, it could hike the tax on non-residential buildings by 50 per cent in 2007, exempting residential buildings.
Again in 2011, it revised the property tax on non-residential buildings by 50 to 100 per cent. “Now, the VMC is planning to hike property tax by 100 per cent, which is likely to come into force next fiscal, he says.
